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Protecting our environment through innovation

By Edmond Alphandery | | Updated: 2013-07-22 17:25

A better use of coal in this context is absolutely central. Its current increasing use is observed not only in developing economies like China, but in Europe as well, and is - as the IEA puts it - "the single most problematic trend in the relationship between energy and climate change".

In this respect, Carbon Capture and Storage (CCS) is the only technology already available that would allow generation and industry sectors (iron, steel, cement) to significantly reduce CO2 emissions. Again, according to IEA, the lack of progress in CCS is most worrisome since it could account for up to 20.5 percent of CO2 emissions reductions by 2050.

As well as furthering the investment into green technologies, I believe substantial policies will help drive them forward.

In today's market economies, clear incentives are the best tools for policy makers to offer to households and firms to lead towards CO2 reductions behaviors.

Firstly, the price of energy is reflected in what the consumer has to pay – as is rarely the case.

Generally, I have found that the price is lower than the true "value" of energy which leads to over use and over consumption. In many countries, fossil fuel consumption is subsidized. In 2011 global subsidies in fossil fuels were seven times greater than that for renewable technologies.

Ideally, at the international level, stakeholders should move forward to create a level playing field by suppressing subsidies and introducing incrementally a CO2 tax which could progressively adjust the price of fossil fuels to their true value which should include the external costs of pollution.

I suggest that all Chinese stakeholders unite to advocate green growth. I think that the most recent 5 year plan aims to reduce energy intensity per unit of GDP by 17. I am certain that a larger penetration of gas in the cities is necessary for the 5 year plan in the gas industry. The plans for energy saving and emission reduction aims to save the equivalent of 670 million tons of standard coal through the transformation and upgrading of boilers, the use of cogeneration (combined heat and power) and oil saving technologies.

I recognize restoration efforts but I stress that China should create a CO2 tax applicable to firms' release of pollution in Chinese cities. Chinese cities are major contributors to the global carbon footprint. They contribute to more than 70 percent of energy related carbon emissions and this is on the rise. Urbanization is huge: every year, the equivalent population of one megacity like Shanghai or Beijing increases in Chinese cities, and 350 million new urban residents are expected to migrate to cities in the next 20 years. I suggest that the cities will pay a decisive role in the future in China's efforts to reduce CO2 emissions.

Secondly, compared to the rest of the world, one of the characteristics of the Chinese cities is that most of them are important industrial centers. Industry and power generation contribute strongly to Chinese city's carbon footprint: in Beijing, Shanghai or Tianjin, 40 percent of the carbon emissions come from power generation, 40 percent from industry and only 20 percent from transport, building and waste.

On the contrary, in the majority of big OECD cities, the big bulk of emissions come from other sources: transport, building and waste.

For China to obtain significant results, it is therefore necessary to change the behavior of the firms, as the majority of them have the financial capacity to act.

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